The existing set up is perfectly alright.Taking away RBI's powers one by one is not in the interests of the economy or the institution. Public Debt management should continue with RBI as long as the economy remains weak and the dependence of the Government on borrowed funds cannot be minimized. RBI's influence on monetary policy is also getting weakened with the proposed setting up of a Monetary Policy Committee as designed by the Government.Further, if inflation targeting is going to be the responsibility of RBI, if it does not have any say in public debt management, RBI cannot do full justice to regulate inflation and the Government will dominate the debt market in its own way leaving RBI a good for nothing Institution like any other body of the Government.RBI has earned a name, reputation and recognition nationally and internationally despite having no independent autonomy and it should not be allowed to be destroyed for some short term political gains. The Economy needs a very strong institution to command respect of the whole world and support for balanced economic development and for this RBI needs to be strengthened, made more powerful with full autonomy. Governments will change every now and then but Institutions like RBI provides the continuity of progressive economic policies and brings stability and soundness to the economy which are essential in these days of globalization.
(This comment is published in Money Life against the article How to Restructure RBI? appeared on 23/3/15)
No comments:
Post a Comment